NADA Economist: Solid December Auto Sales Cap Off 2011 with 10% Increase
McLEAN, Va. (Jan. 4, 2012) - The Detroit 3 auto manufacturers - General Motors Co., Ford Motor Co. and Chrysler Group LLC - held a key inventory advantage over their competitors, which led to higher U.S. new car and light truck sales in December, says Paul Taylor, chief economist of the National Automobile Dealers Association (NADA).
“The Detroit 3 dealers had nearly 50 percent of the inventory available for sale during December, and collectively enjoyed sales increases of more than 12 percent for the month,” Taylor said. “The inventory advantage for manufacturers based in North America will provide sales momentum during the first quarter of 2012.”
Economic growth has slowed in Europe as a result of the sovereign debt and banking difficulties there, he added. Volkswagen, with manufacturing plants in Europe and United States, made significant U.S. sales gains in December as well.
To better compete with the Detroit 3 brands, Taylor expects auto manufacturers in Asia and Europe to focus on the growing U.S. light vehicle market by accelerating their efforts to rebuild inventories of cars and light trucks at U.S. dealerships.
“Looking ahead, aging light vehicles currently on the road at more than 10.7 years old, affordable credit and added incentives from manufacturers struggling to regain market share will drive stronger light vehicle sales as 2012 unfolds,” Taylor said. “Interest rates remain at historic lows and cash incentives are likely to be a part of several automaker efforts to regain market share.”